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Reader's Digest says bankruptcy financing approved

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February 20, 2013 04:21 PM EST | AP


NEW YORK — The parent company of Reader's Digest says a court conditionally approved its debt financing, allowing it to stay in business and pay its employees and freelancers while it restructures its business.

RDA Holding Co. says the court approved an agreement for $105 million in financing, $11 million of which will be available immediately. A final hearing on the plan will be held in March.

On Monday RDA filed for filed for Chapter 11 bankruptcy protection for the second time in less than four years, saying it needs to cut its debt so it can keep restructuring. The company says it will keep publishing the magazine during bankruptcy proceedings and aims to be out of Chapter 11 in six months. It plans to cut its debt 80 percent, to $100 million.